"Theo Bekkers" <[email hidden]> wrote in message
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Quoted message said:Claude said:Yeah all of that's probably true and can explain to a large extent
why bikes are cheaper in the US than they are here. But in general
good bikes are still more expensive in the US and most other markets
than the technical aspects of production and distribution would
warrant. Like most 'luxury' goods, there are big margins for the
producerSpeak to your LBS, he makes most of his income from selling and servicing
cheap sub $300 bikes. For the time and effort involved in selling a $5000
bike, it's barely worth it. He also probably sells $30,000 worth of $300
bikes for each $5000 one.Theo
Yep - that's prety close to the mark, especially with the pretty ordinary
markup on complete bikes. We stock some cheapies, but not as many as the
previous owner did. I find they cost too much to sell - too much time spent
on warranty work. Retail margins are so low that warranty work eats the
margin pretty quickly.
Mid range bikes are the best - a low rate of warranty return so the margin
stays with the shop. Higher range bikes cost a lot to buy and move slowly.
I'd like to have more, but the risk for a small retailer is hard to justify.
Bigger shops can buy multiples so they get reduced wholesale prices - small
retailers like me find it hard to pay full price then price match what the
chains quote. We tend to do higher end bikes on special order - then we know
we have the sale and can afford to shell out the full wholesale. Not
whinging, by the way, that's just competition.
Most of our income comes from cheap bikes bought elsewhere and brought to us
to repair or bling up. Down to a certain level that's OK. Huffys and the
like tend to come back too often with the customer complaining that "I only
had the gears fixed last month and they're stuffed again" and blaming us for
defective work. We try and discourage repairs to the super cheapies because
we tend to fix small problems free in the hope that we get the next bike
sale from them (no minimum workshop charge here!)
Remember as well that the prices we see from the US tend to be from the
larger shops and online retailers. What the small retailer's prices are like
in the US, I couldn't say, but I suspect the larger retaikers are squeezing
the small shops as much as here.
The only edge we have is in service - we get so much business from people
who bought their bikes from big retailers but are very unhappy with the cost
of service and perceived lack of care from the big shops. We get a lot of
referred business from these customers who advise friends and relatives that
paying us a few bucks over the special price of the big shops more than pays
off in savings as the bike needs tweaking.
There you go - a little insight into what I've learned in the 18 months I've
had the shop. Certainly not something you'd do for the money!
Cheers,
Frank